Research for Less
You don't need a big budget to find out if there's a market for your business.
Q: I want to start a hobby shop in an area around Boston where there are currently no hobby shops. I've been conducting my own market research by asking local people about my idea, and I've gotten a huge positive response. I think there's a large market for this store, but I'm not sure how to begin the process. Any advice?
A: Your hunch about the need for a local shop may be right on. However, your research efforts shouldn't end here. There's more data you can uncover to support your expectations about a business's success as well as to uncover any potholes in your thinking.
You should cover the bases more thoroughly by examining a variety of information sources. Once you've squeezed out more details from both conventional and unconventional sources, then you can confidently move ahead. Here are more strategies to consider:
- Contact the appropriate industry or trade association. Inquire about research reports or survey data available to members. Information gleaned from these resources can help you connect with more local hobbyists and shop owners, spot trends, and circumvent unprofitable or problematic situations. Industry organizations often provide a business with a start-up resource package upon request-so ask for one.
Start with two groups: the Hobby Industry Association (HIA) and the National Retail Hobby Stores Association (NRHSA). HIA produces a "Nationwide Craft/Hobby Consumer Study" that includes data on purchasing habits and information sources used by hobbyists. NRHSA's Web site includes a Hobby Resource section and a searchable database of its membership. Both organizations host annual conferences. You'll find more industry groups listed in the reference book, World Directory of Trade and Business Associations, which you can usually find at your local library.
- Hire an MBA team. Through the Small Business Institute program, qualified graduate students are assigned projects to tackle for local businesses, including market studies. The work team gives you a detailed report and an oral presentation. Located at nearly 250 colleges and universities nationwide, some schools collect nominal fees from their clients. Any small-business owner or manager is eligible to participate. For information on a local program, call the Small Business Advancement National Center at (501) 450-5300.
- Call on a business research center. There are sites nationwide that provide inexpensive research services to businesses. These facilities are usually affiliated with an academic library. For example, the Center for Business Research (516-299-2833) at Long Island University has researched projects from the organic food market to high-tech firms moving to Silicon Mesa. The Internet-Plus Directory of Express Library Services: Research and Document Delivery for Hire lists 500 libraries that provide low-cost research services.
- Study a set of old and current phone books. A shop may not exist today but are you sure there's never been one in the area? Look to see if there's a category heading for your idea, confirm how much competition exists and the movement of other businesses-those who've closed their doors or have grown or moved to other locations. Old phone books can be found at public libraries.
- Expand your focus group effort. Aim to interview a few hundred local hobbyists. Where do hobbyists hang out online? Find out what listserv discussion groups are available for your prospective customers. Subscribe to that list, learn the group's posting protocol, and then pose your research question, asking members from the Boston area to reply. Begin your listserv search at http://tile.net/lists/. Also find out which hobby magazines sell their subscriber lists. You may be able to purchase a tailored list of names, addresses and phone numbers of neighborhood folks for you to contact for your survey. Check out entities such as Krause Publications, which is dubbed the world's largest hobby publisher.
- Visit your "first stop" business information center. These offices can provide information about licensing, permits, your particular business type and running a business in your community in general. Check the government listing in your phone book.
Go through these additional steps, and you'll be on your way to business success!
Kimberly Stansell is an author, entrepreneur and businesswoman in Los Angeles. She has a knack for turning her desires into reality with little or no money and helps others do the same in her book Bootstrapper's Success Secrets: 151 Tactics for Building Your Business on a Shoestring Budget(Career Press). For more business-building tips and resources, visit her Web site, www.kimberlystansell.com.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.
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